01—Abstract
Summary
Summary of the 10-Q filed April 30, 2021. Cited figures are marked; the original filing is the authoritative source.
Charter Communications, Inc. (CHTR) reported robust financial results for the first quarter of 2021, demonstrating significant year-over-year growth in key areas.
Total revenues increased by 6.7% to $12.52 billiona, driven primarily by strong performance in residential Internet and mobile services. Adjusted EBITDA, a key profitability metric, surged by 12.5% to $4.95 billion, indicating effective cost management and operational efficiency. Net income attributable to Charter shareholders more than doubled, rising from $396 million in Q1 2020 to $807 million in Q1 2021, translating to a substantial increase in diluted earnings per share from $1.86 to $4.11.
The company's operating activities generated strong cash flow, with Free Cash Flow increasing by 33% to $1.86 billionb, underscoring its ability to generate cash from its core operations. Charter continued its aggressive share repurchase program, demonstrating confidence in its valuation and commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Revenue increased 6.7% year-over-year to $12.52 billion, driven by Internet and Mobile growth.
- Adjusted EBITDA rose 12.5% to $4.95 billion, reflecting improved profitability.
- Net income attributable to Charter shareholders more than doubled to $807 million.
- Diluted EPS grew significantly from $1.86 to $4.11.
- Free Cash Flow increased by 33% to $1.86 billion.
- Mobile lines nearly doubled, reaching 2.68 million.
- The company repurchased approximately $3.5 billion of its Class A common stock and Charter Holdings common units in the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed April 30, 2021Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $12.52B$11.74B | +6.7% |
| Operating Expenses | $10.45B$9.94B | +5.2% |
| Operating Income | $2.07B$1.80B | +14.8% |
| Net Income | $807.00M$396.00M | +103.8% |
| EPS (Basic) | $4.22$1.91 | +120.9% |
| EPS (Diluted) | $4.11$1.86 | +121.0% |
| Shares Outstanding (Basic) | 191.40M207.83M | −7.9% |
| Shares Outstanding (Diluted) | 205.87M212.81M | −3.3% |
05—Questions
Frequently Asked Questions
What drove the significant increase in revenue?
Revenue growth was primarily driven by an increase in residential Internet customers, which added $679 million due to a higher number of customers and price/product mix adjustments, and a substantial 90.7% increase in mobile revenues to $492 million, fueled by a near doubling of mobile lines.
How is the company managing its debt load?
Charter maintains a substantial debt level, with principal outstanding at $84.3 billion. However, the company is actively managing its debt through refinancing activities, as evidenced by new debt issuances in March and April 2021, and a continued focus on maintaining leverage ratios within its target range of 4.0x to 4.5x Net Debt to Adjusted EBITDA.
What is the outlook for the mobile segment?
The mobile segment continues to be a significant growth area, nearly doubling its lines and increasing revenue by 90.7%. However, it is also a growth investment, with mobile services reducing Adjusted EBITDA by approximately $80 million and free cash flow by $184 million in the quarter due to associated growth costs, sales and marketing expenses, and capital expenditures for network build-out.
What is the company's capital allocation strategy?
Charter prioritizes returning capital to shareholders through share repurchases, having spent approximately $3.5 billion in the first quarter of 2021. The company also invests significantly in capital expenditures to support network growth and infrastructure, with $1.82 billion spent in Q1 2021, primarily on scalable infrastructure and line extensions.
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